Effective for the 2014 tax year, the new Family Tax Cut provides families can reducing the family’s taxes by up to $2,000.
The calculation itself is a little complicated, but if you are a couple with kids under 18, this will almost certainly save you money.
The basic concept is to level the playing field for all families. Thanks to progressive tax rates, when a couple earns two equal incomes, they pay lower taxes than a couple with the same total income, but with one higher income earner. This new policy estimates the tax impact of splitting the income equally between the couple, and directly reduces the taxes of the higher income earner.
Click here to read the government’s announcement.
As always, I’d love to hear from you if you have questions or would like to discuss your personal circumstances.